EOQ Model: Economic Order Quantity
EOQ Model: Economic Order Quantity
EOQ Model: Economic Order Quantity
CONTACT:
0322-3385752
R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA,
KARACHI, PAKISTAN
EOQ Assumptions
% of
Category Inventory Value
Housing (building) cost 6%
Material handling costs 3%
Labor cost 3%
Inventory investment costs 11%
Pilferage, scrap, & obsolescence 3%
Total holding cost 26%
EOQ Model
Annual Cost
Order Quantity
EOQ Model
Annual Cost
Holding Cost
Order Quantity
Why Order Cost Decreases
Holding Cost
Order (Setup) Cost
Order Quantity
EOQ Model
Annual Cost
Holding Cost
Order (Setup) Cost
Order Quantity
EOQ Model
Annual Cost
Holding Cost
Order (Setup) Cost
Avg. CS = OQ / 2
= 80 / 2 = 40 coffeemakers
= 40 x $78 = $3,120
CONTACT:
0322-3385752
R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA,
KARACHI, PAKISTAN